SouthPoint

06/24/2011

A first glance of recent reports from southeastern housing contacts indicates that activity in the region improved on a year-over-year basis. The majority of builders reported that sales in May were flat to slightly up compared with a year earlier, and close to half of brokers reported sales increased.

However, the May new home sales increase is over weak levels a year earlier; builders' comments indicate that sales remain at low levels. Southeastern broker reports may be a tad misleading as well. Reports from Florida brokers continued to be more upbeat than reports from other brokers in the region. As noted in last month's update, Florida contacts reported that cash sales of distressed homes continued to drive activity.

Actually, sales activity in Florida aside, sales in the region appear to be more in line with recent national trends; the majority of brokers outside of Florida reported that sales in May were below the year-earlier level. Additionally, many noted that comparisons were expected to be down compared with last spring's sales when the federal housing stimulus was in play.

Most southeastern contacts reported that home inventory levels were flat to down compared with a year earlier. The majority of Florida brokers reported that inventories were down from a year earlier. A Jacksonville broker reported, "When a home comes on the market in our area that is priced at a great value, we are seeing multiple offers on a regular basis. We have actually seen some foreclosures with multiple offers sell for more than list price. There are fewer homes to show buyers especially in some of the better neighborhoods."

Contacts indicated more modest year-over-year home price declines in May.

Looking ahead, most southeastern contacts anticipate home sales growth will weaken over the next several months.

Note: May poll results are based on responses from 89 residential brokers and 38 homebuilders and were collected June 6–15, 2011. The housing poll's diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. Positive values in the index indicate increased activity while negative values indicate decreased activity.

By Whitney Mancuso, a senior analyst in the Atlanta Fed's research department

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